Equities Market Sheds N103bn as Investors React to Poor Q3 Earnings

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WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

Nigerian equities shed N103 billion last week following negative reactions to financial results of companies for the third quarter (Q3) ended September 30, 2016.  Investors have remained cautious in recent times as they awaited the results, which were expected to be poor due to the macro-economic headwinds.

And when the results hit the market last week, it was mixed. While some did poorly, some braved the challenging environment and ended the period stronger. However, some did very poorly, posting losses. Consequently, investors reacted negatively, leading to a decline of 1.1 per cent in the Nigerian Stock Exchange (NSE) All-Share ASI to close at 27,294.21, while market capitalisation closed lower at N9.375 trillion.

However, the NSE Premium, NSE 30, NSE Banking, NSE Insurance Indices depreciated by 3.53 per cent, 0.43 per cent, 0.44 per cent, 0.29 per cent respectively.

 The NSE Industrial Goods index emerged the best performing sector, gaining 2.7 per cent on account of strong bargain hunting in Lafarge Africa Plc. The NSE Oil & Gas and NSE Consumer Goods indices gained 0.3 per cent apiece.

Daily Market Performance   Summary

The market resumed  on a negative note with the NSE ASI depreciating marginally by  0.08 per cent to close at 27,574.95 on Monday. The depreciation recorded in the share prices of Cadbury, Oando, Ecobank Transnational Incorporated ETI, United Bank for Africa (UBA) and GTBank Plc were responsible for the loss recorded.

The total value of stocks traded on the floors of the NSE was N1.06 billion, up by 61.76 per cent from N656.02 million recorded the previous day. The total volume of stocks traded was 101.18 million shares in 2,256 deals.  In line with the bearish performance, sectors were broadly bearish as all indices closed lower save for the NSE Industrial Goods Index, up 0.37 per cent on the back of persistent bargain hunting in Lafarge Africa Plc (+1.1 per cent). The NSE Oil & Gas Index (-0.6 per cent) led sector decliners as sell pressure on Oando (-3.3 per cent) and Mobil Oil (-2.4 per cent) dampened sector performance.  The Insurance index closed (-0.3 per cent) lower on account of AIICO Insurance Plc (-4.9 per cent) while the impact of the gains in Zenith Bank (+1.7 per cent) on the NSE  Banking Index (-0.3 per cent) was offset by losses in Union Bank  (-5.3 per cent),ETI (-1.7 per cent).

 The bearish trend persisted on Tuesday as the NSE ASI dipped 1.7 per cent to close at 27,098.52.  Weak sentiments for bellwether – Dangote Cement pushed the market down by N163.6 billion.

However,  activity level improved as volume and value traded rose 11.1 per cent  and 16.2 per cent  to settle at 112.4 million  units and N1.2 billion respectively.

In terms of sectoral performance, four sector indices closed lower while only one advanced. The NSE Industrial Goods index led the pack of decliners, falling 2.1 per cent on the back of sell pressure on cement companies – Ashaka Cement (-9.7 per cent) and Dangote Cement Plc (-4.8 per cent). The NSE Banking Index trailed as it declined 0.71 per cent on account of losses in Zenith Bank (-0.7 per cent) and GTBank (-0.4 per cent). Similarly, the NSE Consumer Goods Index fell by  0.2 per cent against the backdrop of price depreciation in Flour Mills of Nigeria Plc (-3.3 per cent) and International Breweries  (-2.8 per cent) while the NSE Insurance Index  shed 0.1 per cent.

The market rebounded on Wednesday, reversing the negative trend of the previous days. The NSE ASI appreciated by 0.08 per cent to close at 27,120.39, while market capitalisation added N7.5 billion to be at N9.3 trillion.

The market sustained the positive trend on Thursday, rising by 0.43 per cent to close at 27,236.78, while market capitalisation rested at N9.35 trillion. Gains posted by  Dangote Cement, Unilever, Lafarge Africa, Total Nigeria and Access Bank bolstered the growth.

The total value of stocks traded on Thursday was N1.76 billion, up by 1.04 per cent from N1.74 billion recorded the previous day. The total volume of stocks traded was 155.59 million shares in 2,648 deals, while the  three most actively traded stocks were: FBN Holdings (30.82 million shares), Access Bank (19.69 million shares) and Transcorp (13.97 million).

The market maintained the bull run for the third consecutive day with the NSE ASI rising by 0.21 per cent to close at 27,294.21. The appreciation recorded in the share prices of ETI, UBA, Lafarge Africa, Total Nigeria and Forte Oil were responsible for the day’s gain.

A total of N1.08 billion was invested in 148.44 million shares, down from N1.76 billion invested the previous day.

 The three most actively traded stocks were: Fidelity Bank (20.36 million), Transcorp (17.80 million shares) and Access Bank (15.49 million shares).

Market turnover

In all, investors traded   678.710 million shares worth N6.875 billion in 11,808 deals last week, in contrast to a total of 674.721 million shares valued at N7.657 billion that exchanged hands  the previous week in 12,290 deals.

As usual the,  Financial Services Industry  led the activity chart with 529.258 million shares valued at N2.774 billion traded in 6,290 deals; thus contributing 77.98 per cent and 40.35 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 58.413 million shares worth N2.704 billion in 2,223 deals. The third place was occupied by the Conglomerates Industry with a turnover of 50.376 million shares worth N95.110 million in 537 deals.

Trading in the top three equities– FBN Holdings Plc, Access Bank Plc and FCMB Group Plc  accounted for 226.665 million shares worth N757.967 million in 1,879 deals, contributing 33.39 per cent and 11.03 per cent to the total equity turnover volume and value  in that order.

Also traded during the week were a total of 5.079 million units of Exchange Traded Products (ETPs) valued at N49.828 million executed in 57 deals, compared with a total of 10,779 units valued at N63,890.18 transacted  the previous  week in 22 deals. Similarly, 4,100 units of Federal Government Bonds valued at N4.287 million were traded in three deals compared to a total of 1,700 units of Federal Government Bonds valued at N1.518 million transacted the preceding week in one deal.

Gainers and losers

Meanwhile, a total of 21 equities recorded price gains, higher than 16 equities of the previous week. Conversely, 41 equities depreciated in price, 38 equities of the previous week, while 118 equities remained unchanged lower than 126 equities recorded in the preceding week.

For the third week running, Caverton Offshore Support Group Plc led the price gainers, rising by 27.9 per cent. Lafarge Africa Plc trailed with 16.2 per cent, while Total Nigeria Plc chalked up 13.7 per cent. E-Tranzact International Plc went up by 10.1 per cent, just as Airline Services and Logistics Plc and Presco Plc appreciated by 10 per cent and 8.9 per cent in that order.

Other top price gainers included: Unilever Nigeria Plc (8.9 per cent); Learn Africa Plc (4.9 per cent);  ETI Plc(3.6 per cent); Cadbury Nigeria Plc (3.5 per cent).

On the negative side, Fidson Healthcare Plc led with 16.4 per cent, followed by Ashaka Cement Plc with 9.6 per cent, while Honeywell Flour Mills Plc shed 9.2 per cent. May & Baker Nigeria Plc and Skye Bank Plc fell by 8.8 per cent and 7.8 per cent respectively.

Other top losers were: National Aviation Handling Company Plc (7.5 per cent); Sterling Bank Plc (7.1 per cent); Dangote Flour Mills Plc (6.4 per cent); Wema Bank Plc (6.1 per cent) and Diamond Bank Plc (6.0 per cent).